How Insurers Are Combating Legal System Abuse
Some ad campaigns suggest that insurance companies, rather than individuals, are responsible for paying large verdicts and settlements.
Factors such as Reptilian Theory, social inflation, litigation funding, and advertising are influencing juries, contributing to the surge in nuclear verdicts—defined as verdicts exceeding $10 million.
The theory suggests that jurors are influenced by their instinctive desire to protect their community or family, and thus may render large awards in cases as a deterrent for future misconduct.
Public perception is shaped by various factors, such as seeing high earnings in professional sports, corporate executive compensation, and large corporate financial events.
Insurers need to handle claims strategically, without being deterred by the possibility of a nuclear verdict, which can lead to inflated settlement values and hesitation to proceed to trial.
